The identification and characterization of signaling molecules regulating hair follicle morphogenesis remains a major challenge in cutaneous biology. The structure plays a critical role in normal skin function and disease: it is a source of stem cells required during wound-healing and other responses to cutaneous damage; a site of origin for several benign as well as malignant skin tumors; and it produces the hair shaft and sebaceous glands whose dysfunction forms the basis of a variety of dermatological disorders. Similar to other organs, the hair follicle develops through a series of inductive signals traveling between adjacent epithelial and mesenchymal cell primordia which ultimately give rise to the adult structure. While it is clear that an on-going dialogue between epithelium and mesenchyme is required for hair follicle morphogenesis, the nature of the messages being transmitted has remained obscure. Expression of Sonic hedgehog (Shh) mRNA, which encodes a secreted morphogen involved in multiple patterning events during development, is detected focally in epidermis that will give rise to hair follicle epithelium. The spatial and temporal expression of Shh are thus consistent with its playing a role in hair follicle morphogenesis, a concept that is supported by our analysis of Shh-/- mice, which fail to form normal hair follicles. Based on these finding and recent evidence demonstrating a pivotal role for Hedgehog proteins in the development of diverse vertebrate organ systems, we hypothesize that Shh functions as an epithelium-derived inductive signal regulating hair follicle morphogenesis, a concept that is supported by our analysis of Shh -/- mice, which fail to form normal hair follicles. Based on these findings and recent evidence demonstrating a pivotal role for Hedgehog proteins in the development of diverse vertebrate organ systems, we hypothesize that Shh functions as an epithelium-derived inductive signal regulating hair follicle development during embryogenesis and post-natal hair cycling. We will test this hypothesis using pharmacologic, immunologic, and genetic approaches to modulate the Shh pathway, both in vivo and in vitro, with the following specific aims: 1) to determine when Shh signaling is required for hair follicle development and cycling; 2) to identify target cell(s) responding to the Shh signal in hair follicles; 3) to identify and characterize the genetic targets of Shh in follicles; and 4) to define and exploit downstream signaling elements mediating the response to Shh in skin. The results of our studies will provide new insight into mechanisms underlying hair follicle morphogenesis. Given the fact that diverse organs use common signaling molecules to drive their development, our findings are likely to be relevant to understanding organogenesis in other systems. Given the fact that diverse organs using common signaling molecules to drive back their development, our findings are likely to be relevant to understanding organogenesis in other systems. In addition, since several components of the Shh pathway have been linked to a variety of human developmental disorders as well as neoplasia, particularly basal cell carcinoma and medulloblastoma, the proposed project will contribute new knowledge to further our understanding of pathological processes involving skin as well as other organs.